India inflation at 4.89%, a 41 month low
May 14, 2013, 8:45 am

The declining price of fruits and vegetables continues to drive down inflation [Getty Images]

The declining price of food items, including fruits and vegetables, pulled down inflation to nearly a three-and-a-half-year low of 4.89 per cent in April, which may present a case for further monetary policy easing.

Inflation based on the Wholesale Price Index (WPI) stood at 5.96 per cent in March – in April last year, it was 7.50 per cent.

This is the lowest level of inflation since November, 2009 when it stood at 4.78 per cent.

Official data released today showed that WPI inflation in the manufactured items category declined to 3.41 per cent in April from 4.07 per cent in March.

The Reserve Bank of India will take into account the declining inflationary trend while unveiling its mid-quarter policy review on June 17.

Earlier this month, RBI cut key interest rates by 0.25 per cent in order to accelerate economic growth.

“Although headline WPI inflation has eased by March, 2013 to come close to the Reserve Bank’s tolerance threshold, it is important to note that food price pressures persist and supply constraints are endemic, which could lead to a generalisation of inflation…,” the RBI had said.

57 founding members, many of them prominent US allies, will sign into creation the China-led Asian Infrastructure Investment Bank on Monday, the first major global financial instrument independent from the Bretton Woods system.

Representatives of the countries will meet in Beijing on Monday to sign an agreement of the bank, the Chinese Foreign Ministry said on Thursday. All the five BRICS countries are also joining the new infrastructure investment bank.

The agreement on the $100 billion AIIB will then have to be ratified by the parliaments of the founding members, Chinese Foreign Ministry spokesman Lu Kang said at a daily press briefing in Beijing.

The AIIB is also the first major multilateral development bank in a generation that provides an avenue for China to strengthen its presence in the world’s fastest-growing region.